Procedures to establish a joint stock company according to the Law of Enterprise 2020

1. Legal basis:

• Law of Enterprise 2020;
• Decree No. 01/2021/ND-CP on enterprise registration promulgated by the Government on January 4, 2021;
• Circular No. 01/2021/TT-BKHDT on enterprise registration promulgated by the Ministry of Planning and Investment on March 16, 2021.

2. What is a joint stock company?

A joint stock company is an enterprise in which:

• The charter capital is divided into equal parts called shares;
• Shareholders can be organizations or individuals, with a minimum of 03 shareholders and no maximum limit;
• Shareholders are only liable for debts and other property obligations of the enterprise within the scope of the contributed capital;
• Shareholders have the right to freely transfer their shares to others, except in cases where:

+ Within 03 years from the date the company is granted an enterprise registration certificate, ordinary shares of founding shareholders can be freely transferred to other founding shareholders and can only be transferred to non-founding shareholders with the approval of the General Meeting of Shareholders. In this case, the founding shareholder intending to transfer the ordinary shares shall not have the right to vote on the transfer of such shares.

+ The company’s charter has provisions limiting the transfer of shares. In such cases, these provisions shall only be effective when are clearly stated on the corresponding stock certificates.

3. Procedures for establishing a joint stock company

(1) Required documents:

• Application for enterprise registration (according to the form in Appendix I-4 attached to Circular No. 01/2021/TT-BKHDT dated March 16, 2021, of the Minister of Planning and Investment).
• Company charter.
• List of founding shareholders and list of foreign investors who are shareholders.
• Copies of the following documents:

+ Legal documents of individuals acting as legal representatives of the enterprise;

+ Legal documents of founding shareholders and foreign investors as individuals; Legal documents of organizations that are founding shareholders or foreign investors who are organizations; Legal documents of individuals acting as authorized representatives of founding shareholders or foreign investors who are organizations, and letters of authorisation.

For foreign shareholder as organizations, copies of their legal documents shall be legalized by the consular authority;

+ Investment registration certificate in cases where the enterprise is established or participated in by foreign investors or economic organizations with foreign investment capital, as prescribed in the Law on Investment and guiding documents.

(2) Competent authority: The Business Registration Office under the Department of Planning and Investment.

(3) Methods of submission: The individual establishing the joint stock company or such individual’s authorized representative shall submit the application dossier to the Business Registration Office through one of the following methods:

• Direct submission at the Business Registration Office;
• Submitting through postal services;
• Online submission.

(4) Deadline for completing the joint stock company registration procedure: 03 working days from the date the Business Registration Office receives a valid dossier.

(5) Result: Enterprise Registration Certificate for the joint stock company.

After completing the procedures for establishing a joint stock company at the Business Registration Office, the company shall carry out the following procedures to officially enter into operation:

• Carve the company seal.
• Purchase a digital signature for the joint stock company.
• Carry out procedures with the tax authority managing the joint stock company.
• Proceed to open a bank account.
• Hang the company sign at the headquarters.

This article is for informational purposes only. The content of this article does not constitute legal advice and should not be considered as detailed legal advice for specific cases. For more information on these issues, please contact us for specific support and advice.